The price elasticity of supply is equal to
A) the change in quantity supplied divided by the change in price.
B) the percentage change in quantity supplied divided by the percentage change in price.
C) the value of the slope of the supply curve.
D) the percentage change in price divided by the percentage change in quantity supplied.
B
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Why do few avocados rot, even though in some seasons of the year far more avocados are harvested than in other seasons of the year?
A) Consumers realize it would be inefficient to let avocados rot. B) Growers vary their advertising efforts with the season of the year. C) Prices fluctuate sharply as supplies increase or decrease. D) The taste for avocados varies proportionately to the supply.
Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is
A) .25. B) .75. C) $1,000/$750 = 1.33. D) 1/.25 = 4.